King County Public Defense Pension Case

Dolan v King County

In Washington it is a mandated government service for counties to provide legal defense
to indigent persons for whom the right to counsel is constitutionally required. King
County provides indigent legal defense services through contracts with the Associated
Counsel for the Accused (ACA) and other agencies, TDA, SCRAP and NDA.

Kevin Dolan is a lawyer paid through ACA to perform indigent defense services for
King County. He is entitled to membership and benefits in the Public Employees Retirement
System (PERS), but King County failed to report him and others to the Department of
Retirement Systems (DRS) and failed to make retirement contributions to DRS.

The Supreme Court agreed with plaintiffs on August 18, 2011. The Supreme Court held that "the employees of the defender organizations are employees of the county for the purposes of PERS." 172 Wn.2d at 320. See the Supreme Court's Opinion.

Settlement of Dolan Class Action

Recent Developments

August 30, 2017 - Judge Hickman signed Stipulated Motion and Agreed Order Concerning Notice of Contribution Payment Options to Class Members. Attached to the order are copies of documents that will be sent to class members. We will post when the Department of Retirement Systems (DRS) plans to send out the documents to Class Members regarding their payment options when we receive that information from DRS. We understand that it should be soon!.

March 11, 2016 - Judge Hickman, by order dated March 11, 2016, with DRS's agreement set up a procedure for handling attorney fee payments. DRS will (with the State Actuary) determine with additional data the total payment value of the pensions obtained. This may affect the amount of each person's share, in a relatively small way. There will be three ways to pay each person's share: (a) lump sum, with rollover from IRAs or other plans allowed; (b) installment payment plan of up to five years; or (c) a percentage reduction in future pension payments. The details will be provided in notices to all class members when procedures are finalized by DRS. The March 11 Order is here.

October 28, 2015 - Order Affirming Attorney Fee Award and Denying Reconsideration signed by Judge Hickman. See the Order here.

August 28, 2015 - Order on Plaintiffs' Motion for a Common Fund Fee Under Bowles v. DRS and for a Class Representative Award signed by Judge Hickman. See Order on Mtn for Common Fund Fee.

November 18, 2014 - Unpublished Opinion filed. Court of Appeals remanded for further consideration of DRS arguments without expressing any opinion about the merits of those arguments.See Unpublished Opinion.

Class members to be enrolled in public pension system

King County and attorneys for the class today announced they have reached a tentative settlement in the Dolan v. King County class action lawsuit. The lawsuit involves claims against King County on behalf of the current and former attorneys and staff of the non-profit agencies that provide its public defense services. The settlement comes after a ruling earlier this year from the Washington Supreme Court requiring King County to enroll class members for pension benefits in the Washington Public Employees Retirement System (PERS).

The plaintiffs are represented by attorneys in the firm of Bendich, Stobaugh & Strong (David Stobaugh, Steve Strong, Lynn Prunhuber and Steve Festor).

The proposed settlement is contingent on approval by the Metropolitan King County Council and Pierce County Superior Court Judge John R. Hickman.

King County enrolled current public defense employees in PERS in April 2012 under an order from Judge Hickman. Under the settlement, class members will obtain pension service credit for the time when they worked at the public defense agencies between January 1, 1978 and April 1, 2012.

King County will pay the PERS retirement contributions attributable to the class members’ service at the public defense agencies, which are expected to be approximately $31 million. Funds for this payment have already been set aside for this contingency, above the County’s normal budget reserves and fund balances. Class members will release King County from all claims relating to pension and other employee benefits up through July 1, 2013.

The proposed settlement also requires that, on July 1, 2013, King County will recognize the class members who are then employed as public defense employees as employees of King County with full employee benefits for their positions. These benefits include King County health insurance and other County benefits. How King County accomplishes this recognition, and how it organizes the public defense function, are left up to King County and are not part of this settlement.

The only payment required from class members is their pro rata share of the Court-awarded attorney fees. The attorney fees will be a percentage of the present value of the future retirement benefits obtained as a result of the Dolan lawsuit, which Class Counsel estimates to be approximately $130 million. The attorney fee percentage is estimated to be about 9.2% or less and is subject to approval by the court. The attorney fees will be advanced from one or more sources and will be re-paid by the class members through deductions from future retirement benefits. The fee award does not increase the amount King County will pay.

“We are pleased with the tentative settlement,” said plaintiffs’ attorney Steve Strong. “It complies with the Washington Supreme Court’s decision in the Dolan case and provides benefits to the class.”

“At King County we’re proud of the excellence of the public defenders and defender staff, and we look forward to resolution of this lawsuit,” said Dwight Dively, the County’s Director of the Office of Performance, Strategy and Budget. “King County has years of demonstrated commitment to supporting effective public defense, and that commitment will frame our decisions as we move forward.”

The director of the King County Office of Public Defense, David Chapman, has already started gathering input from the public defense agencies, the courts and other stakeholders about how to organize and deliver public defense services in the future. Any proposal would be transmitted by the County Executive to the King County Council for adoption.

Under the settlement, neither King County nor the class are making any admissions about the merits of the claims or defenses asserted in the Dolan lawsuit. A more detailed notice describing the terms of the proposed settlement and the process for the court’s consideration of it will be issued after it is approved by the County Council and preliminarily approved by the court.

Class Members

Pierce County Superior Court Judge John R. Hickman certified the following class:

All W-2 employees of the King County public defender agencies and any former
or predecessor King County public defender agencies who work or have worked for one
of the King County public defender agencies within three years of the filing of this
lawsuit [i.e., back to January 24, 2003];

and

All W-2 employees of the King County public defender agencies and any former or predecessor King County public defender agencies who have not worked for one of the King County public defender agencies within three years of the filing of this lawsuit, but who work or have worked in a PERS-eligible position within three years of the filing of this lawsuit [i.e., back to January 24, 2003].

The lawsuit was filed on January 24, 2006 and accordingly, the time period covered by the class definition is January 24, 2003 to July 1, 2013 (Settlement Agreement, paragraph 54). To be a class member one must be employed by one of the King County public defense agencies - TDA, ACA, SCRAP, or NDA - during that time period or, alternatively, one must be a former King County public defense employee (lawyer or staff) who left one of the agencies at any time before January 24, 2003, but who was in a PERS-eligible position at any time from January 24, 2003 to July 1, 2013.

Class Expanded - New Members Contact the Firm

If you worked for one of the King County public defense agencies - TDA, ACA, SCRAP, NDA or the predecessor agency Eastside Defender Association - at any time before January 24, 2003 and you also work or worked in a PERS-eligible position at any time during the time period January 24, 2003 to July 1, 2013, please contact us at PublicDefense@bs-s.com.

History of the Dolan Class Action Litigation

During the 1980’s the King County public defenders sought to obtain parity with King County prosecutors. Following a study initiated by King County, King County decided expressly in 1989 to provide public defenders with the same pay as prosecutors. But King County did not agree to provide benefits parity. Thus, the King County public defenders and staff did not have the same employee benefits, particularly retirement benefits, that their counterparts in the Prosecutor’s office received. Over the years the King County public defenders tried to obtain, for themselves and the public defense staff, employee benefits including retirement benefits, that were the same as King County employees. But King County always refused to provide these benefits.

Kevin Dolan thought this was unfair. He contacted David Stobaugh and Steve Strong of Bendich, Stobaugh & Strong to determine whether the public defenders and staff had a viable claim. Bendich, Stobaugh & Strong thoroughly investigated Dolan’s claim for more than two years using the Public Records Act to obtain thousands of pages of King County documents showing County control of the public defense agencies. They determined that Dolan had a viable claim for PERS retirement benefits.

Thus, in January 2006, Kevin Dolan’s class action lawsuit was filed against King County on behalf of the lawyers and the staff of the King County public defense agencies. The complaint alleged that King County breached its duty to enroll the lawyers and staff of the King County public defense agencies in the Public Employees Retirement System (PERS) and that King County failed to pay required PERS contributions to the Department of Retirement Systems (DRS).

King County denied liability and denied that plaintiffs were due any relief. King County asserted that it had no obligation to enroll the lawyers and staff of the King County public defense agencies in PERS or to make contributions to PERS on their behalf because the lawyers and staff of the King County public defense agencies were not employees of King County and were instead employees of those non-profit corporations that provided public defense services as independent contractors to King County. King County also asserted a counterclaim, which sought reimbursement from the Plaintiff and the members of the Class for monetary contributions that King County might have to pay to PERS on their behalf due to the litigation, if the case were successful. King County also raised a statute of limitations defense.

The Court, the Honorable John R. Hickman, decided that the case would be addressed in three phases (1) class certification, (2) liability, and (3) if necessary, relief.

Dolan moved to certify the class as a mandatory injunctive class action under Civil Rule 23(b)(1) and (2) and the Court certified the class. After the class was certified, King County sought a summary judgment ruling that even if plaintiffs’ claims were successful, the statute of limitations would limit their claim for retroactive PERS service to three years from the date of filing the complaint. The complaint was filed on January 24, 2006 and thus under King County’s motion the class could not obtain relief for service in any time period before January 24, 2003. Plaintiffs opposed King County’s motion, arguing that the statute of limitations does not begin to run until a class member’s retirement. The Court denied King County’s motion on the statute of limitations. The Court said it was premature to decide the issue at that point and reserved ruling on the statute of limitations until after the liability was decided.

After extensive discovery and numerous depositions, the parties moved for summary judgment on liability. The Court denied the cross-motions for summary judgment because the material facts were in dispute. After the summary judgment motions were denied, the parties requested that the Court try the case on the written summary judgment record. The Court agreed and the Dolan case was tried before the Court in November 2008.

After the trial and the Court’s review of the extensive record, the Court issued a lengthy written decision in favor of the class on liability and the Court later issued findings of fact and conclusions of law and a permanent injunction requiring King County to enroll currently employed class members in PERS. (Copies of these documents can be found here.) The Court stayed the injunction while King County appealed.

The Supreme Court agreed to hear King County’s appeal. In August 2011, the Washington Supreme Court issued its decision affirming the Court’s decision on liability. Dolan v. King County, 172 Wn.2d 299 (2011). The Supreme Court’s decision was 5 to 4. (A copy of the decision is posted here.)

The Supreme Court held that King County:

“has exerted such a right of control over the defender organizations as to make them agencies of the county. . . . and that under Washington common law as adopted in RCW 41.40.010(12), the employees of the defender organizations are employees of the county for purposes of PERS.”

King County moved for reconsideration. The State of Washington, the Washington State Legislature, the Washington State Association of Counties, the Washington State Association of County Officials, and the Association of Washington Cities, and the Washington State Association of Municipal Attorneys joined King County in asking for reconsideration. In its reconsideration motion, King County said that if reconsideration was not granted, the King County public defenders and staff would be King County employees for other purposes because the test is the same as used for PERS:

Moreover, this Court’s decision has additional consequences not considered by this Court. If the employees of the public defender corporations are County employees for purposes of public pensions, there is no reason to doubt that these individuals will also be employees for purposes of unemployment compensation, industrial insurance, health care insurance, state and local taxation, wages and hours legislation and many other situations not yet contemplated by this Court. (Emphasis added.)

Plaintiffs opposed reconsideration. The Supreme Court denied reconsideration and sent the case back to the Court in February, 2012.

After the Supreme Court sent the case back to the Court, plaintiffs learned of potential legislation that could possibly negate the Supreme Court’s decision. Bendich, Stobaugh & Strong hired a lobbyist and engaged in lobbying in Olympia, Washington to protect the class. Plaintiffs successfully obtained express language in the bill exempting the Dolan case from whatever effect the legislation might otherwise have on their pension rights. In April 2012, the parties signed a stipulation that the legislation would not be used as a defense in this action, and the Court approved the stipulation and made it a court order.

Upon plaintiffs’ motion the Court modified its permanent injunction and required King County to commence enrolling current King County public defense employees in PERS and to start making PERS contributions on their behalf.

After the Court modified its permanent injunction, the parties obtained, from the King County public defense agencies and from many class members, information to identify the class members, determine their years of service as a King County public defense employees and their pay during these years.

Questions can be emailed to the attorneys representing Mr. Dolan and the class of public
defenders at PublicDefense@bs-s.com.